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Investment Approach

Our investment approach integrates your personal financial characteristics with the three controllable variables of investing – taxes, risk and cost.


The personal financial characteristics are your values, goals, family objectives, current situation, and interests.


We seek this information in our discovery process from two sources.


  • First, we review your documents, such as tax returns, legal documents, account statements, and insurance policies.
  • Secondly, we ask questions to determine what is most important to you, where you have been, and what you want to achieve.

The three controllable variables of investing are taxes, risk, and costs.


Taxes are not only a variable of investing; they can also be one of the two biggest long-term obstacles to accomplishing your goals. The other obstacle is inflation.

As CPAs, we have an advantage in understanding how to position assets to take advantage of your personal tax situation.


Regarding risk, we generally spend a lot of time here because of the importance of making sure you understand the risk/return trade-off.

The two questions we want to address in this area are: How do you want your money to work for you? And do you prefer to transfer the risk to a third party or simply minimize the risk?


It has been said that performance is temporary, but costs are forever. We make sure you understand not only the explicit cost of an investment, but also the less-discussed, implicit cost.

We also make sure that you understand the costs of the recommended platform relative to alternative choices.

The one investment variable that cannot be controlled is the market.


The integration of these variables and aspects produces a plan that is personalized to you. This document is commonly referred to as an Investment Policy Statement. After we have reviewed the plan together, you may take this information and implement the plan yourself or have us implement it for you.

Implementation of Your Plan

Implementation of a plan is as important as the plan itself. When we implement a plan, we choose among several platforms, but they generally have three things in common – institutional money management, asset class investing and periodic rebalancing.

Institutional Money Management

Institutional money management is the “wholesale” side of the investment industry, to which individuals generally do not have access as the minimums may be as high a $5 million per fund.

Asset Class Investing

Asset class investing is a method of diversifying among investments that have dissimilar characteristics.

Periodic Rebalancing

Periodic rebalancing is a method of buying low and selling high among the dissimilar investments.

Asset-class investing and periodic rebalancing are methods of reducing risk, but do not guarantee against loss. Institutional money management also addresses risk reduction, with a lower cost structure than retail investments.

We are committed first to making sure you thoroughly understand the investment approach. Before you invest a dime, we discuss how to exit the investment platform. Liquidity is an important friend and second only to diversification in terms of importance to the investor.

The Challenge of Emotion

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Investor emotions can play a major part in the success or failure of an investment portfolio, as well as the overall wealth plan. For most of us, money is bound up with powerful emotions, such as security, confidence and even fear.  But the emotions of investing can cause you to lose focus on important areas of your financial life, most of which have absolutely nothing to do with the stock market.


We know that remaining patient and disciplined can be extremely difficult, especially when stocks or other assets are soaring or plummeting. The way our brains are wired can cause us to make emotional decisions about our money at precisely the wrong moments.


As the Cycle of Market Emotions chart above illustrates, many investors tend to “buy high” and “sell low.” Markets are sometimes prone to sharp and erratic movements, which can precipitate panic and cause investors to sell at inopportune times. Conversely, during a strong bull market, investors often rush into the market because they feel “elated” and buy at the peak.

Ultimately, this kind of emotional, short-term behavior can have detrimental consequences, including dramatic portfolio underperformance.


Moving in and out of markets and asset classes can result in investors missing those relatively small number of days when markets soar unexpectedly. Therefore, it’s vital that you stick to your plan — especially during periods when the financial markets are behaving in extreme ways.

The Cost of Emotions

Despite the abundance of financial information available to us, we are not always rational human beings.  The issue is that we have these natural instincts that can make investing quite challenging.  These primary emotional flaws are seeking patterns, repeating our mistakes, and fearing loss.


Many consider how the brain looks for patterns that are not actually patterns one of its more fascinating flaws.  It appears that we are incredibly clever about providing casual explanations about random events.  For decades, people have explored the use of algorithms to predict the markets.  Yet, all the PhD’s and technicians using algorithms and charts have failed to accurately predict the market.  The natural instincts of looking for patterns actually steers us wrong when making financial decisions.

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Quantitative Analysis of Investor Behavior (QAIB), 04/2018.

The second disturbing challenge is, when emotions lead us to make bad decisions, we are likely to repeat those bad decisions.  These short-term emotions that are left unchecked can lead to a pattern of bad habits such as smoking, over-eating, or drinking.  The concept of repetitive behaviors might also help explain why the Dalbar studies show that individual investors working on their own fail to achieve the gains that the stock market provided over twenty year periods.


“Loss aversion” is the most recognized flaw of the brain.  The emotional part of our brain punishes us more for a loss than rewards us for a gain.  Yet, in order to profit, one must take risk.  Peter Diamondis in his book, Abundance, offers a hypothesis that our fear of loss comes from the idea that early man had to be attuned to danger in order to survive.  Today, when the markets trend downward, people sell because of the perceived danger of loss.

The investors not only have to deal with the above mentioned cognitive biases that challenge the investor decisions, but there may be as many as ten to twelve cognitive biases that challenges the investor decisions, which begs the question how can the individual investor be sure that he is not falling prey to any one of them at any given time?


Wise investing recognizes that we are individually impaired in our investment decisions due to the way we are wired.  Creating a team headed by a wealth manager can keep our emotions from derailing our investment goals.